Your romantic image of Wall Street, with the ticker tape and screaming traders and Schedule II drugs? Consider it shattered! Michael Lewis, best-selling author of Moneyball and The Blind Side, has written all about the automated manipulations in the stock market that screw over investors. He will discuss Flash Boys: A Wall Street Revolt (W.W. Norton, March 2014) with The Dish’s Andrew Sullivan at George Washington University’s Lisner Auditorium on Friday, April 4th at 7 p.m.
Lewis is known for being a great storyteller, and he manages to turn a pretty complex topic into a nonfiction page-turner in Flash Boys. The basic idea is that the stock market is rigged due to high frequency trading (HFT) technology used since the financial crisis. HFT firms use lightning-fast algorithms to “predict” what shares you’re about to buy, beating you to the server transacting the order, then grabbing the shares first to sell to you at a higher price. It’s not illegal, Lewis says, because most people don’t know about it or don’t understand how it works. (Since the writing of the book, the Securities and Exchange Commission, New York attorney general Eric Schneiderman, and some big banks have expressed concern about the practice.)
Enter the dramatic narrative. Where HFT is the villain, the white-collar “flash boys” are the heroes. Bradley Katsuyama ran the U.S. trading desk at the Royal Bank of Canada, and grew suspicious when he was repeatedly unable to fill orders at their named prices. Tech support gave him the run-around, so he asked other traders and found they were dealing with the same thing.
Though Katsuyama was shocked that he was being “hoodwinked,” he was more interested in fixing the problem than going after the profiters. He teams up with algorithm guru Rob Park, Wall Street trader Ronan Ryan, and others to “create their own stock exchange.” Many of them left highly lucrative positions to form Investors Exchange (IEX), in hopes of “protecting investors from Wall Street’s predators” and sparking a culture change in the stock market. But would they succeed?
You’ll have to go to the event, read the book, or see the inevitable major motion picture adaptation to find out. Two of Lewis’s other ten books, Liar’s Poker and The Big Short, have also been tapped for movie versions. Lewis lives in Berkeley, Calif. with his wife and three children.
Tickets to the event may be purchased online here and are $30 (including a book) or $10 for GW students.